The Week in Ethics: The Role of Leaders in Toyota’s Rebuilding Trust

More than a year has passed since Toyota’s unintended acceleration problem became a crisis after a tragic accident forced the company to begin to address the issue publicly. Toyota has done a number of things to correct the problem and deal with the bigger picture of quality, however, the role of its leaders in helping rebuild trust and reputation is also critically important.

In the last 13 months, Toyota has issued more than 12 million recall notices globally to fix unintended acceleration and other quality issues identified. In February 2010, CEO Akio Toyoda announced he was creating a Global Quality Special Task Force to tighten the system of delivering quality. A month later Toyota launched a North American Quality Task Force to work with the Global effort as part of improving the flow of information.

Creating these task forces raise expectations. To further restoring trust in the brand, the public needs to hear from Toyota’s leaders what is being done and how that ensures potential defect information will be handled differently. These periodic progress updates, which employees should also know, can be on their websites, in formal remarks, and given to the media. Toyota has established leadership in its lean manufacturing, so perhaps it can establish and talk about best practices in dealing with quality issues globally to protect customers.

October 26, 2010 Consumer Reports reinstated their “recommended” label for eight Toyota models that were recalled and fixed. Also that day, Consumer Reports released their reliability report and, based on owner responses to the survey questionnaire, Toyota models were considered among the most reliable of all automotive brands. The sample of owners in the survey who were Toyota owners liked their vehicles. That is validating. However, if Toyota were to become known in the industry for being very proactive in getting and applying feedback received from the Customer Call Center and dealers about potential problems, its reputation would precede it.

Toyota’s quality issues transcended the universe of their customers and exploded onto front pages of newspapers around the world for a prolonged period. Toyota’s definition of stakeholders has forever expanded; how they communicate with the larger public is part of rebuilding trust.

Ads help but, when you are trying to rebuild trust, precision in language is critical to avoid distraction from skeptics.

The ad said, “At Toyota we care about your safety which is why we’re investing $1 million every hour to improve our technology and your safety.” In response to critics’ challenges, Toyota acknowledged the money was the global Research and Development budget, much of which was spent on quality and safety technologies.

Last week, new allegations surfaced in a federal lawsuit against Toyota filed in U.S. District Court in Santa Ana, California alleging that Toyota bought back vehicles from owners complaining of sudden acceleration and required them to sign confidentiality agreements that prevented their discussing it. The over 1,000-page complaint amends a multi-party suit against the automaker filed several months ago. Toyota responded denying confidentiality agreements were requested. The statement said Toyota looked forward to defending itself in court and affirmed the speed and thoroughness with which it investigates complaints.

Included in the new complaint is information about a company memo that discussed efforts to minimize the outcome of the crisis and instructs employees to mark emails about sudden acceleration as “secret,” remove attachments, and tells them not to include executive names. The memo could be a rogue effort by someone who still doesn’t understand the rules for rebuilding trust, or it could be a sanctioned way of constricting information. Either way it plays to Toyota’s greatest liability in building back trust — the sense that as a Japanese company, sharing information has limits and transparency isn’t a priority.

Leaders in Japan, in the United States, and in markets around the world, set the tone for the culture, and how the public understands what a company stands for. Toyota’s leaders have seemed low profile since the media and Congressional investigation frenzy in February 2010. As a world leader Toyota has a statesman role. Mistakes were made, mistakes were corrected, a process is ongoing and a public larger than customers has a stake in understanding who Toyota’s leaders are, what they are doing, and why it matters. That, plus process changes, goes a long way to rebuilding trust.

One thought on “The Week in Ethics: The Role of Leaders in Toyota’s Rebuilding Trust”

I recently wrote a blog on workplace ethics (www.ethicssage.com). In it I identify setting an ethical tone at the top as one of ten steps a company can take to improve its ethical culture. It appears that Toyota is in need of a makeover in its ethical DNA. The company waited for the bad news to recall autos even though it apparently knew about some of the potential problems. The Toyota situation eerily resembles the problems with the Ford Pinto almost fifty years ago. Even though the potential for injury and death due to vehicle malfunction may not be as great as in the Pinto case, both companies reacted slowly to the problem and took a legalistic approach to dealing with it. Also, they failed to see the ethical issue that the driving public has an (ethical) right to drive a vehicle and not expect it to blow up as a result of accidents at relatively low speeds (Pinto) or to uncontrollably accelerate and cause an accident where others are harmed (Toyota).